Summary
The Supreme Court held that employees retiring under SBI’s special VRS with at least fifteen years’ service on the cut-off date were entitled to proportionate pension computed under the Pension Fund Rules. SBI’s approved contractual package had to be read with its memorandum and the IBA proposal. Neither the later clarification nor failure to amend the rules justified withholding that benefit. Relief was extended to all similarly situated retirees, with arrears payable within three months.
Issues
- Whether the special SBI VRS entitled employees with fifteen years’ service to proportionate pension.
- Whether the clarification and existing pension rules defeated the approved scheme’s benefit.
- Whether relief should extend to similarly situated retirees and carry interest.
Provisions considered
- Clauses 5 and 6, particularly clause 6(c), State Bank of India Voluntary Retirement Scheme, 2000The approved benefit package included proportionate pension; reference to Pension Fund Rules governed computation rather than exclusion of eligible fifteen-year retirees. (¶¶ 20, 21, 39, 40, 53, 54, 56, 64)
Held
- The scheme, supporting memorandum, IBA proposal and Board approval had to be read together. The approved special VRS created an independent contractual package entitling eligible employees with fifteen years’ service to proportionate pension, distinct from ordinary voluntary-retirement requirements. (¶¶ 16, 17, 18, 19, 20, 21, 34, 35, 39, 40, 53, 54, 56, 57, 61, 64)
- The clarification reiterating the existing twenty-year rule did not amend or supersede the Board-approved scheme. SBI could not use that clarification or its own omission to amend the pension rules to defeat the promised benefit after employees accepted retirement. (¶¶ 7, 8, 24, 41, 44, 45, 47, 48, 49, 53, 62)
- SBI, as a State instrumentality, remained bound by fairness and non-arbitrariness in its contractual dealings. Reading the special scheme to deny its pension component would permit the bank to benefit from its own wrong; any lack of drafting clarity was to be construed against it in this context. (¶¶ 44, 45, 46, 47, 49, 50, 53, 57, 59, 60, 61, 62, 63)
- Employees completing fifteen years or more by the cut-off date were entitled to proportionate pension computed according to SBI Pension Fund Rules. The same benefit was directed for all similarly situated VRS retirees without requiring individual litigation. (¶ 64)
- No interest burden was imposed if the bank complied and paid arrears within three months. Default would make the amount carry six percent annual interest from the judgment date. (¶ 64)
Result
Appeals disposed of; proportionate pension directed for all similarly situated eligible SBI VRS retirees, with compliance and arrears payment within three months. On default, six percent annual interest from the judgment date. No costs.